pinqy
Gold Member
The actual problem is normative vs descriptive. I wouldn't define any baseline, because any baseline is purely arbitrary.And now we run into problems when you assume that the difference should be considered unemployment. Ageing is not the only reason for a decline in the labor force/employment population ratio. If more younger people go to school or choose not to work while attending school, or if more families go to single earner to devote more time to children and/or save costs, then that's not a labor market problem, and it's misleading to view it as "shadow unemployment."
OK we have a problem defining a base line.
Perhaps not, but that doesn't make those who chose to do so unemployed. The UE rate measures only the Labor market. We can, and should, also consider short term trends in labor market participation, and look at marginally attached for potential future participants, but it's not good analysis to try and say what things should be.I argue that secular changes such as an increased desire for more education or to devote more time to family act over longer periods and don't explain the size of short term changes we observe. Had the job market not tanked, I think those secular changes would not have been observed at all.
Why? Then you're no longer looking at the actual labor market, but some hypothetical one. And not sure what you mean by "adjust for it like the shifting age distribution." Are you claiming a shifting age distribution is somehow adjusted for, or that it should be?If there is a secular change in these areas we could adjust for it like the shifting age distribution.
There was a steady decline in labor force participation for ages 16-19 during that time.But going back to 1997--2007 there is no trend line for increasing educational participation nor for reductions in average work week.
Aging population and decking youth participation? There certainly is. But regardless, you can only measure what people are doing, not what they should be doing.Not saying it can't happen, just that the evidence doesn't seem to support an exogenous sociological change in the labor market.
Again, normative vs descriptive. Just because there "should be " more employed doesn't mean anything when measuring what the Labor Market is.The CBO today released an analysis that as a side note mentioned that their base macro model pegged the number of jobs that should have been created C.P. to be a bit over 5 million. My calculations put the number at 5,160,000, which in statistical jargon is "close enough for government work".